The Iran war is affecting money flows from Indians abroad, with non-resident Indians withdrawing nearly $2 billion more than they deposited in Indian bank accounts in March, according to Reserve Bank of India (RBI) data.
The total value of NRI deposits with Indian banks fell to $165.65 billion at the end of March from $167.58 billion in the previous month. Total inflows into these deposits also slowed, falling to $14.41 billion in 2025-26 from $16.16 billion in the previous fiscal year.The decline was mainly seen in Non-Resident External Rupee Accounts (NRERA) and Non-Resident Ordinary Accounts (NRO), where withdrawals were higher than new deposits during the month.
Meanwhile, the balances of non-resident or FCNR(B) accounts in foreign currency remained virtually unchanged. NRERA and NRO accounts are mostly used by Indians working abroad, especially in Middle Eastern countries, bankers said. Meanwhile, FCNR(B) accounts are generally used by Indians residing abroad, especially in Western countries, ET reported. Reserve Bank of India data showed that NRERA deposits stood at $98.56 billion at the end of March, down from $99.77 billion a year earlier.
NRO deposits also decreased to $33.33 billion from $34.09 billion. However, FCNR(B) deposits remained steady at $33.76 billion compared to $33.72 billion earlier.A longer period of geopolitical uncertainty could impact NRI deposits more, bankers and economists said. South Indian Bank Managing Director BR Seshadri had earlier told ET that flows could be further affected “if the problem (conflict in West Asia) persists for a longer period and the livelihoods of people in those countries are affected.”